What is the situation that best describes the following amortization schedule? Payment # Amount Paid Interest Portion Principal Portion Principal Balance 12,000.00 1 3,132.39 210.00 2,922.39 9,077.61 2 3,132.39 158.86 2,973.53 6,104.08 3. 3,132.39 106.82 3,025.57 3,078.51 3,132.38 53.87 3,078.51 0.00 Total 12,529.55 529.55 12,000.00

Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
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What is the situation that best describes the following amortization schedule?
Payment # Amount Paid Interest Portion Principal Portion Principal Balance
12,000.00
1
3,132.39
210.00
2,922.39
9,077.61
2
3,132.39
158.86
2,973.53
6,104.08
3,132.39
106.82
3,025.57
3,078.51
4
3,132.38
53.87
3,078.51
0.00
Total
12,529.55
529.55
12,000.00
a. Reuben received a loan of $12,000 from a bank to purchase office supplies. He obtained the loan at an interest rate
of 7% compounded quarterly for 1 year. Calculate the size of her end-of-quarter payments and construct an
amortization schedule for his loan.
b. Fabrizio received a loan of $12,000 from a bank to purchase office supplies. He obtained the loan at an interest rate
of 70% compounded quarterly for 1 year. Calculate the size of her end-of-quarter payments and construct an
amortization schedule for his loan.
C. Reuben received a loan of $12,000 froma bank to purchase office supplies. He obtained the loan at an interest rate
of 7% compounded every six months for 2 years. Calculate the size of her end-of-quarter payments and construct an
amortization schedule for his loan.
d. Reuben received a loan of $12,000 from a bank to purchase office supplies. He obtained the loan at an interest rate
of 9% compounded quarterly for 1 year. Calculate the size of her end-of-quarter payments and construct an
amortization schedule for his loan.
3.
Transcribed Image Text:What is the situation that best describes the following amortization schedule? Payment # Amount Paid Interest Portion Principal Portion Principal Balance 12,000.00 1 3,132.39 210.00 2,922.39 9,077.61 2 3,132.39 158.86 2,973.53 6,104.08 3,132.39 106.82 3,025.57 3,078.51 4 3,132.38 53.87 3,078.51 0.00 Total 12,529.55 529.55 12,000.00 a. Reuben received a loan of $12,000 from a bank to purchase office supplies. He obtained the loan at an interest rate of 7% compounded quarterly for 1 year. Calculate the size of her end-of-quarter payments and construct an amortization schedule for his loan. b. Fabrizio received a loan of $12,000 from a bank to purchase office supplies. He obtained the loan at an interest rate of 70% compounded quarterly for 1 year. Calculate the size of her end-of-quarter payments and construct an amortization schedule for his loan. C. Reuben received a loan of $12,000 froma bank to purchase office supplies. He obtained the loan at an interest rate of 7% compounded every six months for 2 years. Calculate the size of her end-of-quarter payments and construct an amortization schedule for his loan. d. Reuben received a loan of $12,000 from a bank to purchase office supplies. He obtained the loan at an interest rate of 9% compounded quarterly for 1 year. Calculate the size of her end-of-quarter payments and construct an amortization schedule for his loan. 3.
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